Date: 05-29-2010

Case Style: Dr. Dongxiao Yue and Netbula, L.L.C. v. Chordiant Software, Inc.

Case Number: 5:08-cv-00019-JW

Judge: James Ware

Court: United States District Court for the Northern District of California (Santa Clara County)

Plaintiff's Attorney: Antonio Cortes, Law Offices of Antonio Cortes, San Rafael, California, Peter Ross and Peter Shimamoto, Browne Woods George, L.L.P., Los Angeles, California represented the plaintiffs.

Defendant's Attorney: Liwen Arius Mah, Mary Elizabeth Milionis, Ryan Jared Marton, Laurence F. Pulgram, Albert Sieber, Jedediah Wakefield and David Kusters, Fenwick & West LLP, San Francisco, California

Description: Dr. Dongxiao Yue and Netbula, L.L.C. sued Chordiant Software, Inc. on a copyright infringement theory. Twelve witnesses testified in the two-week jury trial, including Dr. Yue, the plaintiff, Steven Springsteel, President and CEO of Chordiant, former and current employees of Chordiant, a representative of a Chordiant customer, and two defense experts, Philip Faillace, Computer Scientist and President of Preferred Software, Inc., and Dr. Matthew Lynde, an economist at Cornerstone Research. Plaintiffs asked the jury to award $33 million in damages.

Defendants admitted they owned Plaintiffs money but disputed the amount of damages and profits sought by Plaintiff.

Outcome: The jury found that defendant Chordiant Software, Inc. infringed four copyrights in two software products developed by plaintiffs Dr. Dongxiao Yue and Netbula, LLC and awarded $1.4 million.

Plaintiff's Experts: Merrill Corporation assisted plaintiffs in the trial preparation and presentation, including the use of the technologies of the courtroom.

Defendant's Experts: Philip Faillace, Computer Scientist and President of Preferred Software, Inc., and Dr. Matthew Lynde, an economist at Cornerstone Research.

Comments: Defendant had offered more than the jury awarded.

Dear Mr. Morlan, I also noted that your page stated that Plaintiffs asked the jury to award $33 million. I am not sure what your source was, but I am unware of such specific demands made by us at the trial. We asked the jury to award around 30% of defendant's profits, as we estimated that our technologies contributed to 30% of their profits. However, since defendant claimed that it lost $18 million from the infringing product, and we didn't have a financial expert to determine the profit number, it's hard to say what the jury did. But in any case, the jury awarded profits. Sincerely, Dongxiao Yue, Ph. D.

Dear Mr. Morlan, It was also false or misleading to state that defendant admitted owing any money to plaintiffs. The first time I heard it from Chordiant was at the jury trial, when Chordiant's CEO Springsteel testified that they owed some money and they were willing to pay the fair amount, then Chordiant's financial experts came to the witness stand and testified before the jury the amount owed was $18000. Before the lawsuit, Chordiant's General Counsel Derek Witte stated that Chordiant owed nothing to Netbula. Sincerely, Dongxiao Yue, Ph. D.

Dear Mr. Morlan, A reader referred to me about your comment of a verdict at http://www.morelaw.com/verdicts/case.asp?n=5:08-cv-00019-JW&s=CA&d=43868 which states that "Defendant had offered more than the jury awarded." As the plaintiff of the case, I can tell you the statement about the settlement offer was false or misleading. (I noted that defense counsel Jedediah Wakefield made similar assertions on his page at Fenwick & West LLP.) Back in late 2008 or early 2009, plaintiffs offered to settle the Yue v. Chordiant case for substantially less than the jury verdict. Plaintiffs' offer for settlement back than was actually less than $1 million. Defendants declined to settle for that amount. Before the jury trial, defendant offered to settle at an amount about 5% higher than the jury verdict, that but was a global settlement with no prejudgment interest, cost and attorneys fees, which will be available for plaintiff as a prevailing party. Plaintiffs have filed a motion to seek more than $600,000 in prejudgment interest, and are preparing for a motion for attorneys' fees under FRCP 36 as defendant failed to admit what plaintiff proved at trial. Once the prejudgment interest is awarded pursuant to Ninth Circuit precedents, the total recovery will be substantially higher than what defendants had ever offered to settle. At the jury trial, defendant claimed that the license fees they owed was about $18k ($18000) and the infringing Chordiant Marketing Director ("CMD") product had made no profits. Defendant's financial expert Dr. Lynde, who testified that after 1600 hours of billable time he found that Chordiant "unfortunately" lost about $18 million from CMD. Defendant also claimed that it did not infringe Netbula PowerRPC copyright. Chordiant maintained that plaintiffs' software products lacked originality for copyright protection, that it could develop an alternative technology in two weeks at a cost of $32k, and it had an express or implicit license to Netbula PowerRPC (the Windows product). Apparently, the jury did not find any of the defendant's stories credible. The jury found that defendant had no express or implied license to any of plaintiffs' technologies. The jury found that defendant infringed the PowerRPC and the JRPC copyrights. The jury awarded actual damages many times greater than $18k, and awarded a portion of Defendant's profits from the infringing CMD product. Also, plaintiffs had no experts testifying in the trial. Merrill Corporation was not an expert, it offered technical assistance in preparing and displaying trial exhibits. After the trial, some jurors stated that it would have helped a lot if plaintiff had a financial expert. I hope this clarifies the facts and hope you will correct the information on your site. Sincerely, Dongxiao Yue, Ph. D. Plaintiff in the Yue v. Chordiant (C08-0019-JW) case. Phone: (510) 396-0012